In 2015, a class action settlement was reached with the Phoenix Life Insurance Company and PHL Variable Insurance Company in two class-action lawsuits surrounding the raising of cost-of-insurance (“COI”) rates on certain policyholders.
The lawsuits claim that Phoenix was unlawful and in violation of the terms of the policies. These policyholders argued that they were unfairly discriminated, charged to recoup past losses, and harmed by the adjustments in April of 2010 and November of 2011. The defendants denied these claims and maintained the opinion that they did nothing wrong.
The Settlement Includes…
Specific parties that are included in the settlement and eligible for payment are people who own or owned Phoenix Accumulator Universal Life Insurance Policy (PAUL) issued between 2004 and 2008, with a face value of $1,000,000 or more, and an issue age of either 65 and above or 68 and above – depending on the policy – that were subject to adjustment.
A qualifying policy is the 2010 Adjustment to COI rates, including the use of the Finding Ratio on specific PAUL series 2 and Series 3 policies. The policy should have had a face amount of $1,000,000 or more, and an insured’s issue age of 68+ that began on April 1, 2010. Also qualifying are the 2011 Adjustment to COI rates on certain PAUL Series 3 policies with a face amount of $1 million or more and an insured’s age of 68 and over. Also, certain PAUL Series 3 and Series 3 policies with a face amount of $1,000,000 or more, an insured’s issue age of 65 and over, that began on or around November 1, 2011.
The Settlement Excludes…
Any officers, directors, employees of the defendant are automatically excluded from the class. This includes affiliates, legal representatives, attorneys, successors, class counsel and their employees, a judge, justice, and judicial official presiding over the actions. As well as the staff of immediate family of any such judge, justice, and judicial official. Owners of policies are excluded if they received a decrease in COI rates or rates that were unchanged in the adjustments. Policies for which prior settlements bar their claim or are subject to separate/ ongoing legal proceedings are also excluded.
As part of the settlement, the defendants agreed not to raise the cost-of-insurance rates for class members until December 31, 2020. In addition, they will not challenge the validity of class members’ policies.
Who is Eligible for Payment?
Those who qualify will be eligible to receive payment from the $42.5 million cash portion of the settlement. If you, as a member of the class, paid a higher COI rate as a result of either the 2010 or 2011 adjustments, than you normally would have, you are eligible to receive a cash payment from the Settlement Fund. You are also eligible you lapsed your policy after receiving a notice of the increase, but before paying the overcharge.
The Settlement Fund is first reduced for opt-outs, costs, fees, expenses, and the payments to the Class Representative. The remaining amount was then divided into two funds: for people who paid a COI overcharge and for those who lapsed after receiving notice of the increase, but before paying the overcharge. Then, the funds were distributed to class members on a pro rata (proportional) basis.
Do you Qualify?
If you or a family member has a life insurance policy with Phoenix Life Insurance, you may be eligible for a payment. Contact the lawyers at Bond and Taylor for more information. Our legal team will help you better understand all of your options. Arrange a free first meeting with an attorney in your area by calling (800) 471-0314.